Socialism temporarily averted in spite of Nancy Pelosi
Posted by Mike Sylvester - 9/29/08 @ 2:31 pm - Filed Under 2008 National Elections, Featured, National Politics
Thank goodness the House of Representatives voted the “700 billion dollar Wall Street Bailout” down by a vote of 227 to 206.
I cannot wait to look at the exact percentage of Republicans vs Democrats against the bill. There is no doubt that some “big Government” Republicans voted for the bailout; however, a size-able number of fiscally conservative Democrats voted against this monstrosity.
Nancy Pelosi was so desperate to pass the bill that she held the vote open past the allowed time frame and she immediately started trying to “twist Democratic” arms to force passage of this bill. She only got two Democrats to switch after time expired.
Do you remember Nancy Pelosi and her promise to run “The most ethical Congress in History?”
Maybe Nancy Pelosi thinks it is ethical to hold votes open past the allowed timeframe so that she can “lean on” Representatives in order to “convince” them to change their votes.
Nancy Pelsoi is an embarassment to the Democratic Party.
THIS POST WAS UPDATED AT 7:06 PM. PLEASE READ THE POST
I think that ABOUT 80% of Republicans voted against the “bailout” along with ABOUT 25% of the Democrats.
Tonight after work I will analyze the vote and put up more accurate information concerning the vote.
This morning Mark Souder said on WOWO he was planning on voting for the “bailout.” It will be interesting to see if he voted for it or against it. My guess would be that he voted in favor of it since he is a “big Government Republican.”
Mike Sylvester
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15 Responses to “Socialism temporarily averted in spite of Nancy Pelosi”
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I’ve been very impressed with Mike Pence during this process. He really has taken leadership with this and the issue of reducing dependency of foreign oil.
Souder did vote for the bailout. That was the last straw in my mind. He will not get my vote.
I watched the entire debate and it was interesting. A few Democrats lined up with the GOP thoughts. Many more who where opposed, did so because there was “not enough” in the package for the poor and those trapped into bad mortgages.
The GOP speakers opposed to the bill pretty well stayed to the same messages we have heard for the last few days. While some offered various other concepts they all held to this bill was wrong.
All the speakers from both sides stated they hated the measure but it was the “only deal.” What seemed funny, if you can call it that, was they all said of what the pending doom would be. Everyone that addressed the issue also hedged their statements at saying this may not be the final fix. I found it interesting they knew what the doom was going to be but had no clue if the fix would be the fix.
I thought the vote would be close, listening to the tone of those speaking. In fact Rep. Barney Frank (D), was low key in his statements of how we got to where we where. His bombastic talk was held in check pretty well.
I honestly believed the votes to support the bill where there even though I opposed it. Then Nancy Pelosi took to the floor and started on a stump speach Obama would have been proud of. I told a friend, who was on the phone at the time, that she either knew they had the votes locked up or she just dropped an Atom Bomb on the vote.
My guess, based on just a gut feeling, that the Democrats did not end up with as many votes they thought they had and the same for the GOP. I think some GOP members, where where “drug along” by the GOP leadership “jumped ship” after Pelosi went off on them and the President.
For once Pelosi running her mouth did the right thing by getting the Republicans back on their “less government” track.
Mike, to hold you over, approx 67% of Republicans and 41% Democrats voted no.
What caused this Crisis?
Pay attention to detail.
Reason to read and weep about our lost
Congressional Leadership.
http://www.youtube.com/watch?v=NU6fuFrdCJY
Folks I could publish the reply from Souder’s office do you want to read it?
I’m appauled by the lack of leardership,
“just say NO”.
Pelosi has nobody to blame except herself for her failure on this bill.
September 26, 2008
The Honorable Nancy Pelosi
Speaker of the House
H-232, U.S. Capitol
Washington, D.C. 20515
Madame Speaker:
As our discussion ended last night, we agreed to continue talking about how to best solve this economic crisis. Like you, House Republicans and I believe we must address this crisis quickly and in a way that protects the interests of families, seniors, small businesses, and all taxpayers. As you know, this process is not about faceless executives on Wall Street, but about keeping families in their homes, safeguarding their retirement security, college savings, and bank accounts, and protecting their jobs.
Over the last week, we have frequently discussed Secretary Paulson’s proposal, and I have repeatedly expressed the need for improvements on behalf of myself and my Republican colleagues. Our staffs have also been in regular contact. To that end, Financial Services Committee Ranking Member Spencer Bachus (R-AL) was tasked by House Republicans to engage in discussions with Chairman Barney Frank (D-MA) and Chairman Chris Dodd (D-CT) and report back to our Conference on the progress of those negotiations before a final deal could be made. Yet Chairman Frank and Chairman Dodd, on several occasions over the last several days, announced that a bipartisan deal was at hand even though the reservations about the underlying proposal I had expressed to you had not been addressed. Each time such announcements were made, or even rumored, I or my staff made it clear to media and to your staff that any such deal did not include House Republicans.
As we demonstrated at the beginning of this year when we crafted a timely agreement on the economic stimulus package, a bipartisan response to our nation’s priorities is never out of reach. And I believe the same holds true at this hour. House Republicans are prepared to stay in Washington to forge an agreement on a proposal that reflects the core free-market, pro-taxpayer principles of our Party.
With that in mind, earlier this week, with your knowledge, I directed our Chief Deputy Whip Eric Cantor (R-VA) to lead a working group of House Republicans to develop a package of ideas to move this process forward. His working group represented a broad cross-section of House Republicans—including both moderate and conservative members—and their goal was to develop ideas worthy of support on both sides of the aisle. We have discussed some of these ideas, and I would like to reiterate that I believe they should be given the consideration they deserve as our economic rescue discussions continue. A brief overview of the working group’s blueprint is included with this letter.
Madam Speaker, we owe it to all those with a stake in this process to continue our discussions until we arrive at an agreement that is acceptable on both sides of the aisle—and more importantly, one that serves the interests of American taxpayers. That is why I ask you and your Democratic colleagues to give the House Republican working group’s proposals serious consideration as this process moves forward. If such consideration is not given, a large majority of Republicans cannot—and will not—support Sec. Paulson’s plan. In the interest of the men and women we represent in Congress, I hope it does not come to that conclusion. I look forward to your timely response and to continuing our work together on an economic rescue package worthy of all of our support.
Sincerely,
John Boehner
Republican Leader
HOUSE REPUBLICAN WORKING GROUP
ECONOMIC RESCUE PRINCIPLES
I. Wall Street – Not Taxpayers – Should Fund the Recovery
The most troubling part of Sec. Paulson’s plan is that it relies wholly on taxpayer funds. House Republicans believe that rather than providing taxpayer funded purchases of frozen mortgage assets to solve this problem, any rescue package should adopt a plan to insure mortgage backed securities (MBS) through payment of insurance premiums.
Currently, the federal government insures approximately half of all MBS and can insure the rest of those still outstanding. However, rather than taxpayers funding the insurance, the holders of these assets should pay for it. The working group’s proposal would direct the Treasury Department to design a system to charge premiums to the holders of MBS to fully finance this insurance.
II. Private Capital – Not Tax Dollars – Should Be Injected Into Financial Markets
Instead of injecting taxpayer funds into the market to produce liquidity, private capital can be drawn into the market by removing burdensome regulatory and tax barriers that are currently blocking private capital formation. In short, too much private capital is sitting on the sidelines during this crisis, and it is well past time to unleash it.
Temporary tax relief provisions can help companies free up capital to maintain operations, create jobs, and lend to one another. In addition, the working group recommends a temporary suspension of dividend payments by financial institutions and other regulatory measures to address the problems surrounding private capital liquidity.
III. Immediate Transparency, Oversight, and Market Reform
Both Republicans and Democrats have made clear that they believe there is not a strong enough oversight component in Sec. Paulson’s plan. The House Republican working group’s proposal addresses this flaw. To begin, the plan would require participating firms to disclose to the Treasury Department the value of their mortgage assets on their books, the value of any private bids within the last year for such assets, and their last audit report. Additional safeguards include:
• To limit federal exposure for high risk loans, the working group’s recommendations mandate that Government Sponsored Entities no longer securitize any unsound mortgages.
• The plan would call on the Securities Exchange Commission (SEC) to audit reports of failed companies to ensure that the financial standing of these troubled companies was accurately portrayed.
• The blueprint would guarantee that Wall Street executives do not benefit from taxpayer funding.
• The proposal would call on the SEC to review the performance of the credit rating agencies and their ability to accurately reflect the risks of these failed investment securities.
• The working group recommends that Congress create a blue ribbon panel with representatives of Treasury, SEC, and the Federal Reserve Board to make recommendations to Congress for reforms of the financial sector by January 1, 2009.
I’d love to see Souder’s reply. I’ve had it wiith Souder. My guess is the Notre Dame endowment owns some mortgage backed securities. Or just the usual “Courage to ignore my convictions” approach.
Anyone interested in “Republicans for that Other Guy” bumper stickers?
Yes, Mark I’m interested in that bumper sticker.
In fact, I thought today about a bumper sticker
that says, “Kiss my lips, we are on our own.”
Bobett,
The Utube video was very good; however, it ignores the items the Republcians did…
Mike
Mike,
Please share the wealth of information to keep this fair.
You see its not about the Repubs or Democrats
it’s more about the Global stabilization that we as Americans must keep in mind.
Here’s one :Dale Amon (Belfast, Northern Ireland/Laramie, Wy) North American affairs:
I have heard a bit of backchannel news from the network infrastructure guys in North America. It became unreachable due to the huge volume of traffic caused by people attempting to get their hands on the Reid-Pelosi financial free for all bill. From what I have heard, this is not just pork… it is the whole damn pig sty.
Bobett,
Try reading the post directly below this one labelled “700 billion dollar buyout.”
In my opinion the fault is 50-60% Democratic and 40-50% Republican.
Mike Sylvester
Mike,
Thanks for sharing the information, At this point its not a matter of blame. It is a National security problem. Yes many have lost a great deal and will continue to with or without this bill.
Listen this is a World Global Stabilization!
Let me share a littler farther into the economics beyond our border.
Here’s a little thought from Global economists:
Some interesting developments have taken place between now and then, however. These merit further analysis. One or two of the commenters in the mentioned Samizdata piece stated that they were keeping abreast of banking developments in the Middle Kingdom. In 2002, Chinese officials admitted that 25% of the loans written by the state owned banks were non-performing. Standard and Poors and a number of others said it was closer to 50%, and possibly more. Within the space of four years, the Chinese administration has revised its estimation of the rate of non-performing loans down to an average of about 12%. How can this be done so fast? I’m not really sure. We are, of course, talking about the writing down or otherwise accounting for of many hundreds of billions of dollars of bad loans. I assume that it’s due to the fact that most or all of the bad loans have been transferred to special “asset management” companies set up by the government. I suspect that the banks have been able to revise their non-performing loans (NPL) ratio down so quickly by performing a debt-to-equity swap with these holding companies. The article linked to immediately above believes the asset management companies have taken a chunk of the banks’ loans and issued them with 10 year bonds in return.
This solution is clearly economic sophistry. At the end of the day, someone has to pay the tab - at some stage depositors are going to want their money. The equity in these holding companies is effectively (if not nominally for the time being) worthless - after all, their assets consist of a bunch of loans that will never be repaid. What is being done about the essentially state-owned industrial sector, which was - and most likely still is - the major recipient of these loans? There’s a saying in China that goes something like “The mountains are high and the Emperor is far away”. I have no doubt that this thinking pervades China’s provincial administration and its state-owned industrial sector, and it explains the pervasive corruption that is, contrary to official publications, as rampant as ever. For every high-profile trial and execution of an apparently “senior” official on corruption charges, there are hundreds of thousands more who not only escape undetected, but are also politically untouchable into the bargain. Quite simply, the central government cannot be everywhere at once, and its reach is frequently limited by local powerbrokers. Consider this case in Guangdong, one of China’s more prosperous provinces, where the central government could not exercise its will due to local political considerations, even though humiliating international media attention was beaming down. And who is to say that the central government is not as corrupt as its provincial counterparts? It is hardly unreasonable to say that corruption probes have a definite glass ceiling when it comes to the powers that be in Beijing.
I believe that the Chinese banking sector’s dire straits constitute the gravest threat to global stability in the coming years. The Chinese government is always harping on about its “deepening” banking and state-owned industrial enterprise reforms, and this is a mantra is being repeated across the world. Unfortunately, the Chinese state is so opaque that it’s impossible to verify the veracity of such claims, and the unrealistic numbers being thrown at us by the Communist party (like the drop of NPLs from 25% to 12% in less than five years) and the shonky juggling of bad debt from one insolvent bank to another woefully undercapitalised holding company do not inspire much confidence in the nature of the reforms. Frankly, I believe the banking sector is too far gone to reform without collapse. In international terms, the crisis in the Chinese banks and SOEs is an elephant that stands in the middle of the room, but everyone is either perceiving it as a mouse or trying to pass it off as a mouse. I believe the Australian government is in the latter category, as are a great many others around the world.
I speculate that governments like Australia’s are acting as they are because they realise the Chinese state is very brittle and unlikely to withstand economic collapse. The massively stimulating US$50 billion or thereabouts annual injection of foreign direct investment is holding the Chinese state together for the time being. Thus, a number of states such as Australia have an interest in talking up Chinese economic reforms - and concealing the parlous nature of the Chinese economy - in the hope that investor confidence will not flag and the Chinese will trade and consume their way out of their problems. Our current economic health is due to huge demand in booming and resource-hungry China. Thus we see documents like this (pdf) that echo the “deepening reforms” mantra consistently spouted by the Chinese administration. Puff pieces like this create and sustain the irrational exuberance that swirls around the legend of the Chinese economic miracle, and inevitably amplifies economic pain when the collapse eventuates. The strategy of our governments may work, but it is an extremely high-risk gamble. The more investment in and commercial intertwinement with China increases, the more outsiders will suffer if the system unravels.
And perhaps the cracks are already becoming evident even to the man on the street. When I was in China in late 2005, ATMs were frequently out of order. I work in the banking sector in Australia, and when an ATM is out of order this nearly always means the machine has dispensed all its money. This was not a problem in late 2004 during my previous Chinese visit - ATM operations at that time were indiscernible to those in Australia. I am speculating here, because I’m not really an expert on this kind of money velocity issue, but perhaps the sudden patchiness of the ATM network is a sentinel of a solvency crisis.
And the collapse could come sooner than we think. In 2007, as per the agreement China entered into upon joining the WTO, it must open up its retail banking sector to foreign banks. This is a potential tripwire. Even if only a small number of Chinese are concerned about the health of their local banks (and thus their savings), when Citibank opens up next door the run on Chinese banks could easily spin out of control. I am assuming that the government is trying to spread the notion of confidence and stability in the retail banking sector. If the Chinese do not panic come 2007 or any time in the subsequent 20 years or so, the banks should be able to reduce their NPL rate to a “more manageable 5%”. It wouldn’t be the first time that people have left their money in a bank that is essentially insolvent because they believe the government will cover any losses incurred. This is a questionable assumption, however, and if I was Chinese I probably would not run the risk.
I am concerned by the consequences of a Chinese economic collapse, and these concerns reach far beyond any short to medium term economic pain. I fear a worldwide economic slump prompted by the collapse of China and its supposedly free market will provoke a popular backlash against globalisation and the liberal market reforms carried out in the 80s in the most successful economies of the West. Capitalism and liberalism will be blamed if people create a nexus between China’s collapse, its market reforms and its intertwining with the greater world economy. There is no shortage of people who will quickly jump to the fallacious conclusion that the free market sunk China - those who protested in Hong Kong and other places would grab plenty of (misguided) ammunition from such a catastrophic event. Ask any one of those economic curmudgeons about post communist Russia’s economy, and I will bet you penny to a pound that their standard response would be “capitalism failed Russia”. This is about as sensible as saying that modesty failed Paris Hilton, for anyone who knows anything about post-Soviet “free market reforms” will know that they were in fact nothing of the sort. This type of thinking could very well gain traction because it makes sense prima facie. Policy reversals may follow and suddenly we’re staring down the barrel of a neo-Keynesian revolution. Consider what the average person knows about China’s economy. We’re all told about China’s free market reforms and its burgeoning capitalist class in the mainstream media - we’re not told about the Chinese government’s meddling in the economy and its mandating of compulsory totalitarian-style imposts on big private companies like internal “political cells”, its retention of control over huge swathes of industry, its equity market (there is currently a ban on IPOs on Mainland bourses) which is stuffed with companies who are controlled by local governments and even the military, rather than shareholder, the board and a CEO. Most importantly, we’re not told about the largely intractable problems with China’s banking sector. Most people truly think China operates under a free market economic system. If the dog’s breakfast that is China Inc fails with all the accompanying pain and fallout, there’s a real danger that free market liberalism will be made the scapegoat internationally.
As I speculated above and in my previous article, Chinese economic collapse will probably preface political revolution. This is in itself an interesting, though disturbing proposition. What would post-communist China look like? Firstly, I should mention that a democratic revolution seems fanciful at best. There is no ANC-type shadow opposition waiting in the wings. The Party is the State, and the Party brooks no opposition. Here are what I consider to be the two most likely outcomes:
1) The military will overthrow the Party. If the banking sector collapses, so too will large chunks of the state-owned industrial sector that are afloat solely due to loans from the state-owned banks. Millions upon millions will be out of work - millions more will lose their pensions and benefits. Many tens - perhaps hundreds - of millions of people will pour onto the street to vigorously and violently protest their loss of savings and/or employment. In its death throes, the Communist Party will order a brutal military crackdown. Trouble is, a military is made up by people with aspirations, families, hopes etc. People who would have lost their savings, too. People whose parents, family and friends are suddenly out of work and without benefits. Most of the officers and soldiers will have no end of sympathy for their countrymen under such circumstances, and it’s difficult to imagine the chain of command will survive under such conditions. The Communist top brass will lose control of the military, which will regroup under a new command. The old political order will be drawn and quartered, Mao will be evicted from his mausoleum and his portrait ripped down from the gate of the Forbidden City. There is no democratic tradition in China, however the country is steeped in a history of rule-by-decree. Expect this for many years to come. Perhaps the best outcome would be highly imperfect democratic elections in several years time.
2) The country breaks up along the lines of regional powerbrokers. Along with rule-by-decree, China also has a long history of warlordism and disunity. Due to the lack of any credible and widespread opposition movement in China, the possibility of a complete breakdown of central control is high if the Communists depart the scene and the military doesn’t fill the vacuum. Hong Kong would almost certainly go its own way. Those provinces with large populations of non-Han citizens like Tibet and Xinjiang may declare their independence - perhaps bloodily ejecting the old order. Inner Mongolia may reunite with Mongolia. There is scope for large-scale dismemberment of the modern Chinese state. That left over will be fractured and ruled perhaps by the old regional party bosses reincarnated as warlords or whoever is able to wrest power from them and maintain it.
Some mention Taiwan as a wildcard that could be used as a distraction by the Central government. I think this unlikely. If the economy collapses, a war with Taiwan is not likely to distract anyone from their sudden poverty. Militarily, it seems unrealistic, too. The military will be stretched to breaking point in an attempt to reign in the chaos on the Mainland, so a massive invasion or attack on Taiwan looks unfeasible.
I truly hope that I am wrong about my bleak assessment, mainly due to the turmoil and potentially massive loss of life that would undoubtedly accompany such an event. I am also deeply concerned about the potential illiberal and protectionist measures that may be enacted in the West and elsewhere in the wake of a Chinese meltdown. The world has made a grave error of judgement in heavily backing an economy designed, constructed and administered by a group of ostensibly reformed Communists. This fact alone should have cooled the foreigners’ ardour. As it stands, the potential for unprecedented economic losses from Chinese investments is enormous. I think we could be facing a very painful depression, which may very well be “cured” with a protectionist, welfarist New Deal-like solution. Scary times ahead.
Source: http://www.samizdata.net/blog/archives/008435.html